According to Makezine, Upton moved away from the idea of creating a more expensive logic board after a conversation with Eric Schmidt, who advised that this was entirely the wrong approach to make Raspberry Pi a continuing success. Rather than charging up to $60 for a new version, Upton decided to concentrate on reducing the size and the cost to make it more accessible. The new direction worked with reported sales of both original Pi computers at 250,000 a month.

“We’ve built several tens of thousands of units so far, and are building more, but we expect demand to outstrip supply for the nextlittle while.”

Pi is not without its competitors and a $5 model can be seen as a sound reaction and evolution of the Foundation’s business approach. In February this year, Upton unveiled the Raspberry Pi 2 with a 900 MHz quad-core ARMv7 Cortex-A7 CPU, twice the memory and complete compatibility with the original generation of Raspberry Pis.

Priced at $35 it wasn’t expensive. The Pi 2 was the first multicore board from the foundation, and provided users with a much faster, more powerful system. But Pi 2 already faced stiff competition from “C.H.I.P”, another single board computer launched via Kickstarter by Next Thing Co in 2015 and dubbed the “world’s first $9 computer”. As a result, the Pi 2 price was dropped to $25, but the launch of the new Zero is now a direct response to competitors seeking to take on Pi.

The Pi Zero, with such a tiny form factor and negligible cost is something which could easily become adopted in any Internet Of Things hardware strategy, with a processor and enough RAM to move simple analytics to the edge. A recent example of this is the successful The Things Network Kickstarter campaign, based on the Arduino Uno boardwith LoRaWAN connectivity with connected units starting from 40 euros. The Pi Zero could represent an even lower price entry point for IOT if combined with connectivity hardware. The original Pi has already seen large vendors place in-memory capabilities as a showcase of what is entirely possible with the device from a software point of view.

As an interesting aside, in 1956 an Elliot 405 cost up to £125,000. In 2015, a Raspberry Pi Zero costs $5.